Re: Credit and Guaranty Agreement dated as of May 11, 2007 (as amended, supplemented, or restated to the date hereof, the "Credit Agreement") among Tekoil and Gas Gulf Coast, LLC, a Delaware limited liability company ("Borrower"), Tekoil & Gas...
Exhibit
10.77
March
31,
2008
Via
CERTIFIED MAIL
Tekoil
and Gas Gulf Coast, LLC
25050
0-00 Xxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, Xxxxx 00000
Attention:
Mr. Xxxx Xxxxxxx
Facsimile:
(000) 000-0000
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Re:
|
Credit
and Guaranty Agreement dated as of May 11, 2007 (as amended, supplemented,
or restated to the date hereof, the "Credit Agreement") among Tekoil
and
Gas Gulf Coast, LLC, a Delaware limited liability company ("Borrower"),
Tekoil & Gas Corporation, a Delaware corporation ("Parent") and the
other guarantors parties thereto from time to time ("Guarantors"),
the
lenders party thereto ("Lenders"), X. Xxxx & Company, as lead arranger
and as syndication agent, and X. Xxxx & Company, as administrative
agent for the Lenders (in such capacity, the "Administrative
Agent").
|
Dear
Xxxx:
We
refer
to the Credit Agreement referenced above and note that all defined terms used
in
the Credit Agreement are used in this letter unless expressly provided for
otherwise. Reference is further made to that certain ISDA Master Agreement
dated
as of May 11, 2007 (as amended, supplemented, or restated to the date hereof,
and together with all confirmations issued thereunder, the "ISDA Agreement")
between X. Xxxx & Company (in such capacity, "Lender Counterparty") and
the Borrower.
As
of the
date of this letter, certain Events of Default ("Existing Defaults") have
occurred and are continuing under the Credit Agreement as a result of (a) the
Borrower's failure to make the principal payment due on March 26, 2008, in
the
amount of $1,000,000, (b) the Borrower's failure to deliver the title opinions
required by Section 8.1(s) of the Credit Agreement by March 8, 2008, as required
thereunder, (c) the Borrower's failure to deliver the Consolidated financial
statements for its fiscal year ended December 31, 2007, the related unqualified
opinion from independent certified public accountants acceptable to
Administrative Agent, and the related report of such accounts calculating
compliance with the applicable Sections of the Credit Agreement by March 31,
2008, as required by Section 5.2(a) of the Credit Agreement, (d) the Borrower's
failure to settle in full its obligations with respect to the GPI Notes, on
terms acceptable to Administrative Agent, on or before March 31, 2008, as
required by Section 8.1(bb) of the Credit Agreement, and (e) the existence
of
the foregoing Events of Default under the Credit Agreement constitutes an Event
of Default under the ISDA Agreement. Without limiting the foregoing, the
"Existing Defaults" as defined in the letter dated March 10, 2008 (the "March
10
Default Notice") also remain outstanding, uncured, and unwaived. This letter
does not constitute a waiver of the March 10 Default Notice or such additional
Events of Default or any of the Administrative Agents' or Lenders' rights
thereunder or with respect thereto.
Tekoil
and Gas Gulf Coast, LLC
Mr.
Xxxx
Xxxxxxx
March
31,
2008
Page
2
of
3
At
the
present time, however, other than as specifically set forth in this letter,
the
Administrative Agent and the Lenders have elected not to pursue any of their
remedies under the Credit Agreement, the other Transaction Documents and
applicable Law. Notwithstanding the foregoing, the Administrative Agent and
the
Lenders reserve all of their rights and remedies and may exercise any or all
of
their rights and remedies at any time without further notice, unless further
notice is required under the Credit Agreement, the other Transaction Documents,
or applicable Law. Additionally, all of the terms and provisions of the Credit
Agreement and the other Transaction Documents are and shall remain in full
force
and effect. You are advised that the Administrative Agent and the Lenders
require strict performance by the Borrower and the Guarantors of all of their
respective obligations, agreements and covenants contained in the Credit
Agreement and the other Transaction Documents, and no inaction or action
regarding any such breach is intended to be or shall be a waiver
thereof.
As
a
result of the continuing nature of the above-described Existing Defaults, the
Lenders have no obligation to make additional Loans until such Existing Defaults
have been waived in writing by the Administrative Agent and the Lenders (it
being understood that neither the Administrative Agent nor the Lenders are
obligated to grant any such waiver). Also, as provided in Amendment No. 3 and
Waiver to the Credit Agreement dated as of October 24, 2007 and Amendment No.
4
and Waiver to the Credit Agreement dated as of January 18, 2008 (a) any
obligation Lender Counterparty may have to make any payment under the ISDA
Agreement shall be suspended and (b) any amounts payable by Lender Counterparty
under the ISDA Agreement may be applied to the Obligations at the Administrative
Agent's election, in such order as may be elected by the Administrative Agent
in
its sole discretion.
In
no
event and under no circumstance shall any past or future discussions with the
Administrative Agent or any Lender, or any forbearance by the Administrative
Agent and the Lender of the rights and remedies under the Transaction Documents,
serve to (a) cause a modification of the Transaction Documents,
(b) establish a custom with respect to any of the Transaction Documents,
(c) operate as a waiver of any existing or future Default or Event of Default
under the Transaction Documents, (d) entitle the Borrower or any Guarantor
to
any other or further notice or demand whatsoever beyond those required by the
Transaction Documents, (e) in any way modify, change, impair, affect, diminish
or release any of the Borrower's or any Guarantor's obligations or liability
under the Transaction Documents or any other liability you may have to the
Administrative Agent or any Lender, or (f) waive, limit or condition the
Administrative Agent's or any Lender Party's rights and remedies under the
Transaction Documents, all of which rights and remedies are expressly
reserved.
Tekoil
and Gas Gulf Coast, LLC
Mr.
Xxxx
Xxxxxxx
March
31,
2008
Page
3
of
3
Pursuant
to the March 10 Default Notice, the Borrower was previously notified that all
outstanding Loans, and to the extent permitted by applicable Law, any interest
payments on the Loans or any fees or other amounts owed under the Credit
Agreement, shall bear interest at a rate equal to three percent (3%) per annum
above the otherwise applicable rate set forth in the Credit Agreement. This
letter shall serve as notice to the Borrower that all outstanding Loans, and
to
the extent permitted by applicable Law, any interest payments on the Loans
or
any fees or other amounts owed under the Credit Agreement, shall continue to
bear interest at a rate equal to three percent (3%) per annum above the
otherwise applicable rate set forth in the Credit Agreement.
The
Existing Defaults described herein are based upon the information available
to
the Administrative Agent on the date hereof and shall not be deemed to exclude
the existence of other Defaults or Events of Default. The failure of the
Administrative Agent to give notice to the Borrower of any such other Defaults
or Events of Default is not intended to be, nor shall be, a waiver thereof.
Furthermore, the Administrative Agent and the Lenders' past, present or future
failure to exercise available rights and remedies notwithstanding the existence
of a Default or Event of Default are not intended to, and shall not, (i) operate
as a waiver of rights and remedies available to the Administrative Agent or
any
Lender pursuant to the Credit Agreement or the Transaction Documents or (ii)
indicate an agreement on the Administrative Agent or any Lender's part to
forbear from exercising its rights and remedies, all of which the Administrative
Agent and each Lender expressly reserve. Further, any single or partial exercise
of any of the Administrative Agent or any Lender's rights and remedies shall
not
preclude any other or further exercise of any available rights and
remedies.
Please
contact Xxxx Xxxxx at (000) 000-0000 or Xxxxx Xxxxxx at (000) 000-0000 with
any
questions or comments.
| Very truly yours, | ||
|
X. XXXX & COMPANY,
as Administrative Agent
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| By: | /s/ Xxxx X. Xxxxx | |
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Name: Xxxx X. Xxxxx |
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| Title: Vice President | ||
